Register for streaming realtime charts, analysis tools, and prices.
Futures Pointing to Mixed Open on Wall Street
US Market
The major U.S. index futures are currently pointing to a mixed opening on Monday, with stocks likely to turn in a lackluster performance following recent strength.
Traders may be reluctant to make significant moves amid uncertainty about the near-term outlook for the markets following the recent climb to record highs.
Some negative sentiment may be generated in a reaction to a report from Reuters indicating the Trump administration is poised to add China’s top chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies.
Reuters said a recent executive order issued by President Donald Trump would prevent U.S. investors from buying securities of the listed firms starting late next year.
Nonetheless, more upbeat news regarding a potential coronavirus vaccine is likely to keep any selling pressure relatively subdued.
Moderna (MRNA) announced that a phase 3 trial of its vaccine candidate indicates an efficacy of 94.1 percent.
The biotechnology company said it plans to request an Emergency Use Authorization from the FDA and conditional approval from the European Medicines Agency today.
While trading activity was somewhat subdued following the Thanksgiving Day holiday, stocks moved mostly higher during an abbreviated session on Friday. With the upward move, the Nasdaq and S&P 500 reached new record closing highs.
The major averages all closed in positive territory, although the tech-heavy Nasdaq outperformed its counterparts. The Nasdaq jumped 111.44 points or 0.9 percent to 12,205.85, while the Dow edged up 37.90 points or 0.1 percent to 29,910.37 and the S&P 500 rose 8.70 points or 0.2 percent to 3,638.35.
For the week, the Nasdaq soared by 3 percent, while the Dow and the S&P 500 surged up by 2.2 percent and 2.3 percent, respectively.
The markets continued to benefit from recent upward momentum, which has propelled the major averages to new record highs.
Optimism about a potential coronavirus vaccine has contributed to recent strength on Wall Street, although some questions have been raised about the efficacy of the vaccine being developed by Oxford University and AstraZeneca.
AstraZeneca Pascal Soriot told Bloomberg the British pharmaceutical giant is likely to run a new global trial of the vaccine candidate.
Nonetheless, overall trading activity was subdued in the shortened trading session, as many traders remained away from their desks following the holiday.
A lack of major U.S. economic data also kept traders on the sidelines ahead of the monthly jobs report due next week along with reports on manufacturing and service sector activity.
Biotechnology stocks showed a strong move to the upside on the day, driving the NYSE Arca Biotechnology Index up by 1.4 percent.
Considerable strength was also visible among semiconductor stocks, as reflected by the 1.2 percent gain posted by the Philadelphia Semiconductor Index. The advance lifted the index to a new record high.
Healthcare and software stocks also saw notable strength, while energy stocks came under pressure over the course of the session.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index tumbled by 2.1 percent, while the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index fell by 1.3 percent and 1.2 percent, respectively.
U.S. Economic Reports
MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of November at 9:45 am ET. The Chicago business barometer is expected to dip to 59.2 in November from 61.1 in October, but a reading above 50 would still indicate growth.
At 10 am ET, the National Association of Realtors is due to release its report on pending home sales in the month of October. Pending home sales are expected to jump by 1.0 percent in October after slumping by 2.2 percent in September.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Stocks in Focus
Shares of IHS Markit (INF) are moving sharply higher in pre-market trading after the information and analytics company agreed to be acquired by S&P Global (SPGI) in an all-stock transaction that values IHS Markit at $44 billion, including $4.8 billion of net debt.
Automotive seating manufacturer Adient (ADNT) is also likely to see initial strength after reporting much better than expected fiscal fourth quarter earnings.
On the other hand, shares of Autohome (ATHM) may move to the downside after the leading online destination for automobile consumers in China released its third quarter results.
Europe
European stocks are mixed on Monday after face-to-face Brexit talks restarted on Saturday, raising hopes of a breakthrough. The U.K. and the EU are in the “last leg of negotiations” over a post-Brexit trade agreement, according to Britain’s foreign minister.
While the German DAX Index has risen by 0.6 percent, the U.K.’s FTSE 100 Index is down by 0.1 percent and the French CAC 40 Index is down by 0.2 percent.
Italian lender UniCredit has moved sharply lower ahead of a board meeting on Sunday to discuss governance issues.
ABN Amro has also moved to the downside. The Dutch bank said it expects a further reduction of staff of around 15 percent by 2024, mostly from 2022 on-wards.
HSBC Holdings has also slumped. According to the Financial Times, the bank is mulling a complete exit from its U.S. retail banking operations.
Meanwhile, Aegon NV shares have climbed. The Dutch life insurer said that it agreed to sell its insurance, pension and asset management business in Hungary, Poland, Romania and Turkey to Vienna Insurance Group for 830 million euros.
AstraZeneca has also advanced. The drug maker said its Forxiga has been approved in Japan for the treatment of patients with chronic heart failure.
Lloyds Banking Group has also shown a notable move to the upside after it named Charlie Nunn as its new chief executive.
Indivior has soared. The drug maker said it would vigorously defend against a legal claim from Reckitt Benckiser Group.
Wacker Chemie AG has also rallied. The German chemical company said that it is currently in advanced discussions with GlobalWafers Co. Ltd. regarding the sale of its entire stake in Siltronic of about 30.8 percent of Siltronic’s total shares outstanding.
Asia
Asian stocks fell broadly on Monday as parts of the region continued to see new coronavirus spikes and reports emerged that the Trump administration is considering blacklisting Chinese chipmaker SMIC as well as oil and gas producer CNOOC.
Shares fell in China and Hong Kong after reports of potential new sanctions on Chinese companies by the outgoing Trump administration and a warning by authorities that Hong Kong’s fourth coronavirus wave will be more severe than the last.
The benchmark Shanghai Composite Index slid 16.55 points, or 0.5 percent, to 3,391.76, while Hong Kong’s Hang Seng Index tumbled 553.19 points, or 2.1 percent, to 26,341.49.
The manufacturing sector in China continued to expand in November, the National Bureau of Statistics said today with a manufacturing PMI score of 52.1. That beat expectations for a reading of 51.5 and was up from 51.4 in October.
The non-manufacturing PMI came in with a score of 56.4, beating expectations for 56.3 and up from 56.2 in the previous month.
Japanese shares ended lower as concerns about spiking coronavirus cases overshadowed encouraging economic data.
The Nikkei 225 Index ended down 211.09 points, or 0.8 percent, at 26,433.62, snapping a four-day rally. However, the index soared 15 percent for the month, marking its biggest monthly gain since January 1994 on optimism over progress in Covid-19 vaccine development and Joe Biden’s U.S. presidential win.
The broader Topix dropped 31.60 points, or 1.8 percent, to 1,754.92 but registered its best monthly gain since April 2013.
Automakers Honda Motor, Toyota, Nissan and Mazda lost 3-6 percent as the yen rose against the U.S. dollar. ANA Holdings declined 0.9 percent after announcing a new share sale.
On the economic front, a government report showed that industrial output in Japan climbed a seasonally adjusted 3.8 percent month-on-month in October. That was roughly in line with expectations and down from the 3.9 percent gain in September.
The value of retail sales in Japan was up a seasonally adjusted 0.4 percent sequentially in October – beating expectations for a 0.1 percent increase following the 0.1 percent decline in September.
Australian markets ended sharply lower as the country threatened to take China to the World Trade Organization over barley duties. Investors also awaited GDP data due on Wednesday for directional cues.
The benchmark S&P/ASX 200 Index ended down 83.30 points, or 1.3 percent, at 6,517.80 but rose more than 10 percent for the month. The broader All Ordinaries Index fell 74.70 points, or 1.1 percent, to 6,742.10.
The big four banks fell around 2 percent, while mining heavyweights BHP and Rio Tinto gave up 1.7 percent and 0.6 percent, respectively.
Treasury Wine Estates shares slumped 6.9 percent. The company said it will implement a series of plans to mitigate the effects of Chinese tariffs on Australian wine exports.
Airline Qantas Airways tumbled 2.5 percent after confirming it would cut 2,000 more jobs.
Private sector credit in Australia was unchanged on a monthly basis for the second straight month in October, the Reserve Bank of Australia said today in a report. On a yearly basis, credit was up 1.8 percent after rising 2.0 percent in the previous month.
Another report showed that company profits in Australia were up a seasonally adjusted 3.2 percent sequentially in the third quarter of 2020. That was shy of expectations for a gain of 4.5 percent following the 15 percent spike in September.
Seoul stocks fell sharply as downbeat economic data prompted traders to book some profits after the recent rally. The benchmark Kospi tumbled 42.11 points, or 1.6 percent, to 2,591.34 after hitting a record high in the previous session. SK Hynix, LG Chem, Samsung Electronics, Naver and Samsung SDI dropped 1-3 percent.
Industrial production in South Korea fell a seasonally adjusted 1.2 percent sequentially in October, Statistics Korea said. That missed expectations for a fall of 1.0 percent following the 5.4 percent gain in September.
The total value of retail sales in South Korea was down a seasonally adjusted 0.9 percent month-on-month in October – missing expectations for a decline of 0.5 percent following the 1.7 percent increase in September.
Commodities
Crude oil futures are slipping $0.32 to $45.21 a barrel after edging down $0.18 to $45.54 a barrel last Friday. Meanwhile, after plunging $23.10 to $1,788.10 an ounce in the previous session, gold futures are slumping $16.60 to $1,771.50 an ounce.
On the currency front, the U.S. dollar is trading at 104.14 yen versus the 104.09 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1986 compared to last Friday’s $1.1963.
